Essays On R&d And Economic Growth

This thesis consists of three essays on R&D and economic growth. The objective is to study the relationship between human capital accumulation, human capital allocation and R&D, on the one hand, and economic growth and welfare on the other.;The first essay, entitled Capital Accumulation, R&D and Economic Growth , integrates two distinct categories of endogenous growth models (the capital-based models and the ideas-based models). A dynamic general equilibrium model is developed, in which both physical and human capital accumulation and investment in R&D are endogenously determined, and successful innovations not only discover new goods and destroy the old counterparts, but also create new knowledge and render part of human capital obsolete. The model shows that both the laissez faire equilibrium and the optimal growth rates depend positively upon the efficiency of human capital accumulation, the size of the economy, the productivity of R&D and the size of innovation and negatively upon the risk aversion coefficient and the rate of time preference; but the monopoly power does not affect the optimal growth rate while it tends to increase the laissez faire growth rate. It also shows that under laissez faire the growth rate may be more or less than optimal, and there always exists a tax/subsidy system which can be used to achieve the optimal growth.;The second essay, Innovative vs. Imitative R&D and Economic Growth , focuses on the allocative aspect of human capital. The essay presents a model, in which innovations and imitations can occur in the same sector at the same time. We discuss two types of imitations: rent-seeking imitations and productive imitations. We identify the channels through which innovation and imitation interact with each other. In the case where imitations are of the rent-seeking type, we show that subsidizing innovation is not necessarily equivalent to taxing imitation: while taxing imitative R&D always induces more investment in innovative R&D and less investment in imitative R&D, subsidizing innovative R&D always encourages innovation but it discourages imitation only if the effective employment in innovative R&D is high enough relative to the effective employment in imitative R&D; if the effective employment in innovative R&D is relatively low, then subsidizing innovation also attracts imitation. In the case where imitations are productive, we show that, in addition to the nonequivalence result, taxing imitative R&D may induce more imitations. In both cases, we show that a subsidy to innovative R&D always speeds up economic growth while a subsidy to imitative R&D always does the opposite, but the effects on welfare of both subsidies are ambiguous.;The third essay, R&D and Economic Growth in Open Economies , extends the framework in the second essay to the context of an open economy. A dynamic general equilibrium model is constructed to analyze the impact of patent protection on economic growth in an open economy context. We consider three patent protection scenarios: No patent protection (NPP), Asymmetric patent protection (APP) and Symmetric patent protection (SPP). Given the assumption that imitation is a rent-seeking activity, we show that stronger patent protection induces a higher world growth rate. A calibration exercise also shows that under the APP assumption, any public policy that encourages imitation (discourages innovation) hurts the world economic growth